Good Monday AM,

On this first day of February, equities are licking their wounds from a horrible January. Staging a little bit of a rally but we will see how far it runs. Regardless of Reddit and Robinhood and Gamestop, AMC, and now today, Silver, markets will return to order and be based for the most part on fundamentals.  I would be careful as the momentum in stocks is changing. As for bonds, which we really care more about as they impact interest rates, despite stocks being up, bonds are flat to improving (both treasuries as well as mortgage bonds). The economic data was mixed today. We have lots of employment data this week with ADP on Wednesday, unemployment claims on Thursday and job report (the biggest report of the month) on Friday. As long as we don’t see stocks run too far where money needs to come out of bonds, I think rates have a good chance to improve this week. That said, I would play your lock/float decisions based on the range, as always. We are at the bottom of the range and the higher probability move is to rise to the top. Remember, range bound is the rule and breakouts are the exception! Long term, I am a bond bull (lower rates).

Speaking of stimulus, Republican lawmakers countered President Biden’s 1.9T plan with a 600B plan.. I am not looking to discuss the merits of either plan, just identifying how big of a divide there is over the issue. It likely won’t be resolved for a few months.

Did you know that today in 1884, The first volume of the ‘Oxford English Dictionary’ was published?